50 Sahms Of Grey

Yen Carry Trade, Emergency Rate Cuts, The Sahm Rule & Two trades to "Fade the Monkeys"

All of sudden, a new Villain has entered the room: “The Yen Carry Trade”

From now on, the “Yen Carry Trade” shall be used as the excuse for any bad decision someone makes:

• You were levered and blew up? It’s the Yen Carry Trade’s fault.

• Remember when, during last week’s Fed Meeting, NVDA added $350bn of market cap in ONE session with a +14.4% rally, making it the biggest single-day market cap gain ever and then the stock collapsed by 20%? I’m not sure that the Monkeys buying NVDA up +10% on the day had anything to do with the Yen Carry Trade, but go ahead and blame it, why not (Regardless, we give them thanks, because we bought NVDA puts that day and closed them for 5x two days later).

Sure, the Yen Carry Trade did pour oil in the speculative fire but it’s too convenient to blame just the Yen for excesses that are driven by many other factors (I would again refer to the piece titled “The Nvidia Liquidity Vortex” where we discuss how Nvidia became a Casino).

50 BPS CUT

Prior to last week’s Fed meeting, we flagged that the probability priced in the Fed Fund Futures Market for a 50bps Rate Cut in September was just too low, at 7% (As usual, we were ridiculed by the consensus monkeys).